In the last month of 2018, the average Canadian home cost $472,000, down nearly five percent.
Last year saw the number of total homes sold in the country down too, to its lowest level since 2012.
Even though December is never really a busy time for home sales, December 2017 was a time when new mortgage stress rules were about to go into effect, and buyers were rushing the market to beat the January 2018 implementation.
Compared to December 2017 numbers, sales were down 19% year over year, according to CBC.
“Trends were pushed higher in December 2017 by homebuyers rushing to purchase before the new federal mortgage stress tests took effect at the beginning of 2018,” said CREA president Barb Sukkau. “Since then, the stress test has weighed on sales to varying degrees in all Canadian housing markets and it will continue to do so this year.”
Rishi Sondhi, economist at TD Bank, said the second half of 2018 has proven the housing market has lost some energy.
“The broad-based nature of the decline suggests that rising interest rates and a tighter lending environment are impacting markets across the country,” said Sondhi. He’s also predicting that 2019 will mimic the recent slowdown, as “the level of sales will remain relatively low compared to recent years.”
If you take out Toronto and Vancouver, urban centres with premium pricing, the average national home price hit just above $375,000 last month.
A recent analysis of new homes set to become available this year will flood the market and slow it down even further, pundits predict.
"Canada has been undergoing a construction boom," said Capital Economics senior economist Stephen Brown in a report. "As has been typical of historic real estate cycles around the world, new supply will reach the market just as demand is falling."